ROCHESTER, N.Y. – Three men are facing serious federal charges today after allegedly running a multi-million dollar wire fraud scheme through their Rochester-based multilevel marketing company, 5LINX. Craig Jerabeck, 56, of Rochester, Jeb Tyler, 44, of Penfield, and Jason Guck, 42, of Victor, were arrested and charged with wire fraud and conspiracy, offenses punishable by up to 20 years in prison and a $250,000 fine.
According to a criminal complaint unsealed today, the trio – Jerabeck, who served as co-founder, President and CEO of 5LINX, and Tyler and Guck, co-founders and Vice Presidents – systematically siphoned funds from investors between 2009 and 2015. The scheme involved creating fake contracted representatives within the 5LINX sales network, funneling money into their own pockets without investor knowledge or approval.
The fraud dates back to at least 2001, when 5LINX entered into agreements with investors that capped executive compensation and required board approval for bonuses. However, the complaint alleges that Jerabeck, Tyler, and Guck bypassed these safeguards by establishing shell companies – fraudulent 5LINX independent contractor accounts – to conceal their identities and the true destination of the stolen funds. These companies were set up to hide the fact that the defendants were secretly receiving millions in extra pay.
Prosecutors claim the defendants deliberately failed to disclose their additional income to investors, resulting in inaccurate financial statements that significantly understated the company’s available cash. Investors relied on these flawed reports when making decisions about their investments, ultimately losing as much as $4,000,000. The scheme involved a calculated effort to mislead, leveraging the structure of the MLM to hide illicit activity.
The investigation was led by Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Adam S. Cohen. Assistant U.S. Attorney Craig R. Gestring is prosecuting the case. The defendants made initial appearances before U.S. Magistrate Judge Jonathan W. Feldman today and were released on conditions. A status hearing is scheduled for May 5, 2017, at 9:30 a.m.
It’s crucial to remember that these are merely allegations at this stage. Jerabeck, Tyler, and Guck are presumed innocent until proven guilty in a court of law. However, if convicted, these men could face a lengthy prison sentence and substantial financial penalties for betraying the trust of their investors and allegedly exploiting the 5LINX system for personal gain. Grimy Times will continue to follow this case as it develops.
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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